Stocks fall on Fed, weak Chinese manufacturing

Trader John Panin, second left, adjusts his glasses as he works on the floor of the New York Stock Exchange Thursday, May 23, 2013. A global stock market slump is continuing on Wall Street as traders worry about how committed the Federal Reserve remains to keeping up its bond-buying program. (AP Photo/Richard Drew)
— AP

Trader John Panin, second left, adjusts his glasses as he works on the floor of the New York Stock Exchange Thursday, May 23, 2013. A global stock market slump is continuing on Wall Street as traders worry about how committed the Federal Reserve remains to keeping up its bond-buying program. (AP Photo/Richard Drew)
/ AP

Trader John Song works on the floor of the New York Stock Exchange Thursday, May 23, 2013. A global stock market slump is continuing on Wall Street as traders worry about how committed the Federal Reserve remains to keeping up its bond-buying program. (AP Photo/Richard Drew)— AP

Trader John Song works on the floor of the New York Stock Exchange Thursday, May 23, 2013. A global stock market slump is continuing on Wall Street as traders worry about how committed the Federal Reserve remains to keeping up its bond-buying program. (AP Photo/Richard Drew)
/ AP

Trader Gregory Rowe works on the floor of the New York Stock Exchange Thursday, May 23, 2013. A global stock market slump is continuing on Wall Street as traders worry about how committed the Federal Reserve remains to keeping up its bond-buying program. (AP Photo/Richard Drew)— AP

Trader Gregory Rowe works on the floor of the New York Stock Exchange Thursday, May 23, 2013. A global stock market slump is continuing on Wall Street as traders worry about how committed the Federal Reserve remains to keeping up its bond-buying program. (AP Photo/Richard Drew)
/ AP

Trader Randy Biller, left, works on the floor of the New York Stock Exchange Thursday, May 23, 2013. A global stock market slump is continuing on Wall Street as traders worry about how committed the Federal Reserve remains to keeping up its bond-buying program. (AP Photo/Richard Drew)— AP

Trader Randy Biller, left, works on the floor of the New York Stock Exchange Thursday, May 23, 2013. A global stock market slump is continuing on Wall Street as traders worry about how committed the Federal Reserve remains to keeping up its bond-buying program. (AP Photo/Richard Drew)
/ AP

NEW YORK 
Stocks fell in early trading, extending a sell-off that began Wednesday afternoon, after Chinese manufacturing unexpectedly contracted and on concern that the Federal Reserve may ease back on its stimulus program.

The Dow Jones industrial average was down 50 points at 15,256 as of 10:28 a.m., a decline of 0.3 percent. It had been down 127 points in the early going following steep losses in European and Japanese markets.

The minutes from the latest Fed meeting released Wednesday indicated that several policymakers are leaning toward slowing the central bank's bond-buying program. That program has been keeping interest rates low and encouraging investors to buy risky assets like stocks.

The Dow is still up 16.4 percent so far this year as hiring and the housing market pick up and as U.S. corporations turn in record profits.

Investors were also disappointed Thursday by a report that showed manufacturing in China, the world's No. 2 economy, unexpectedly shrank this month. China's booming economy has been a major driver of global growth in recent years and investors worry when they see signs that it's slowing down.

Global stock markets fell sharply on Thursday, starting in Asia where the benchmark Nikkei index fell 7.3 percent after Japanese government bond yields spiked and news was released about the slowdown in Chinese manufacturing. The sell-off extended to Europe where Germany's DAX index, which has been at a record high, slid 2.7 percent.

In other U.S. stock trading, the Standard & Poor's 500 index was down 9 points to 1,646, or 0.5 percent. The Nasdaq composite was down eight points at 3,454, or 0.2 percent.

In commodities trading, the price of crude oil slipped $1.42, or 1.5 percent, to $92.87 a barrel. Gold rose $18, or 1.3 percent, to $1,385.30 an ounce. The dollar fell against the euro and the yen.

In U.S. government bond trading, the yield on the 10-year Treasury note fell to 2.02 percent to 2.04 percent.

Among stocks making big moves, Ralph Lauren fell $5.37 to $182.69, a loss of 3 percent. The apparel seller reported revenue that fell short of what financial analysts were expecting. Sluggish economic conditions and the decision to cut certain businesses reduced sales.

PC maker Hewlett-Packard bucked the downward trend. The stock surged $2.95, or 14 percent, to $24.16, after the company delivered second-quarter earnings that topped the estimates of both its own management and the analysts who influence investor perceptions.